Hypo NÖ keeps earnings on track for growth

Landesbank in Lower Austria made a profit of 38 million euros in the first half of the year. Due to special effects that took effect last year and led to an increase in the result, this corresponds to a minus compared to the half-year profit for 2023, which amounted to 50.8 million euros, the St. Pölten-based bank announced on Thursday.

Pre-tax profit was 48.2 million euros, up from 66.5 million in the same period last year. Meanwhile, net interest income rose from 86.6 million euros to 94.1 million euros.

Compared to the half-year results of 2022 (€19.4 million profit after tax) and 2021 (€25.8 million profit after tax), this year's half-year earnings are stable on the growth curve. Without the one-off effect from the previous year, there would have been an increase in earnings this year as well, the bank says.

Reduced administrative costs

According to Hypo NÖ, the half-year figures for this year were positively influenced by higher interest income and lower administrative expenses. Despite inflation, the latter decreased by 7.7% to EUR 55.7 million. This also led to an improvement in the expense ratio (cost-to-income ratio / CIR) from 52.21 percent at the end of 2023 to 47.95 percent.

Hypo NÖ specializes in financing public infrastructure and real estate. Starting next year, banks will have to hold more equity for real estate financing due to a new set of rules (Capital Requirements Regulation III/CRR III). With its current Common Equity Tier 1 (CET1) capital ratio of 19.82 percent, Hypo NÖ considers itself well equipped for this. The effects of the new regulation have already been simulated in recent years, the bank writes in its forecast.

Management also sees the bank as resilient despite the current economic weakness. However, no specific forecasts were provided on individual key figures.